What is product positioning?
Product positioning is a strategic exercise that defines where your product or service fits in the marketplace and why it is better than alternative solutions. The goal is to distill who your audience is, what they need, and how your product can uniquely help. Product positioning is the basis of your marketing story.
The outcome of product positioning is an internal document that informs external messaging — including how you will communicate product benefits to customers. Positioning helps ground your product marketing efforts in the real value you provide beyond features and functionality.
Define your positioning now
Your ability to articulate the key benefits of your product and the problem it solves is critical to business success. But you may find yourself in a company where product positioning strategy is not well-defined. Maybe this is because there is unclear ownership or an ever-changing vision. Dig deeper and you may realize that you can lead a collaborative effort to fine-tune the positioning. Your colleagues in sales and marketing will likely be strong advocates of this work — effective positioning makes it possible to craft meaningful messages and create even more value for customers.
What is the best way to develop product positioning strategy?
Product positioning is a cross-functional exercise. It typically involves product management and product marketing working closely together to define the core essence of your product. You will need to bring together your knowledge of the following areas:
Understand the customer
Your positioning strategy should succinctly capture who your customers are and what they need. Describe the attributes of your target customers, including demographic, behavioral, psychographic, and geographic details. You will also want to provide insights into the main problems the customer is trying to solve. Use your persona profiles to inform your positioning strategies and help the broader team build empathy with your customers.
Conduct market research
You need to know what alternatives customers have to your product so you can highlight what sets your offering apart. Research your direct and indirect competitors to understand how they serve your customers’ needs. Your market research should also include interacting directly with potential customers to gather ideas — for instance using surveys, focus groups, or empathy sessions. This will allow you to differentiate your product from the competition and help you explain to potential customers why your solution is the best option to solve their problems.
Assess the product
Your positioning must be built on the unique value your company and product provides. Conducting a SWOT analysis is a useful way to objectively analyze what your product or service is doing well and where it can do better. This ensures that your marketing messages aligns with the product experience, thus helping customers make informed decisions.
What elements should your product positioning consider?
Product positioning is made up of core building blocks that explain your product’s unique value. After you have completed your customer, market, and product assessments, you can define your product positioning, align the broader team around core messaging, and build a product marketing plan.
Here are the key elements that define your product positioning:
Vision | The overall direction for where your product is headed |
Mission | What you will do or build to make your vision a reality |
Market category | The market that you are in and your key customer segments |
Tagline | Catchphrase or slogan you use to describe your company or product |
Customer challenges | Major pain points for your customers |
Company and product differentiators | Unique, value-creating characteristics of your company or product |
Brand essence | The core attributes you want to be known for |
Here is a product positioning template you can download for free to capture the key positioning elements described above for your product or service.
What is a product positioning statement?
Once your positioning is defined, create a brief product positioning statement that describes your target audience, what sets your product apart, and why customers should care about it. Here is an example of a positioning statement template:
For [group of users] that [need/want], [company/product] is a [category/solution] that uniquely solves this by [benefit].
It would be helpful to use an example company to talk through this. Let’s use Fredwin Cycling, a fictitious company that builds a cycling app. The target market is predominantly cycling enthusiasts who are interested in improving their fitness. Your customer and market research reveals that users are concerned about their health but are struggling to stick with an exercise program. Users want to stay motivated by connecting with like-minded friends. The product addresses this need by providing a social cycling community that promotes friendly competition and tracks workout performance.
Here is an example of a product positioning statement for Fredwin Cycling:
For cyclists that want to connect with other athletes, Fredwin Cycling is the leading social fitness application that uniquely brings the cycling community together by promoting healthy competition.
What influences how a product is perceived?
Your product positioning shapes how you want your product to be known in the market. But there are many different factors that can affect how your product is perceived. The major influence is what customers experience when they actually use your product and interact with your company. It is the summation of the Complete Product Experience (CPE) that determines what customers think and feel about your product.
There are seven core areas that contribute to the CPE:
Marketing | How potential customers learn about your product and decide if it might be a fit |
Sales | How prospects get the information they need to make a purchasing decision |
Technology | The core set of features that customers pay for |
Supporting systems | The internal systems that make it possible to deliver the product |
Third-party integrations | The ecosystem of products the customer uses |
Support | How customers receive product training and assistance |
Policies | The rules that govern how your company does business |
Remember, every touchpoint with your company either reinforces or undermines your positioning. So while you should consciously plan how to position your product, you should think broadly about every aspect of the adoption process. Because your customers will decide what they really think about your product.
What are some types of product positioning strategies?
Customer perceptions of your product can be altered — positively or negatively — by any aspect of your CPE. Clearly defined product positioning will help you maintain a cohesive message about your product's unique value at each touchpoint. But while your product's value should be unique, your positioning strategy does not have to be completely original.
There are several standard types of product positioning strategies that companies use to differentiate their products. Here are some common types of product positioning:
Price | Position your product as the more affordable option on the market |
Quality | Convey that your product is high quality or luxury. This can be an effective positioning strategy against product rivals that are competing on price. |
User | Target a specific user group, demographic, or application that is relevant to your product. |
Product type | Shift customer perceptions and reach new market segmentations by selecting an alternate category for your product. |
Competitor | Demonstrate directly or indirectly that your product is better than a competitor's product. |
Differentiation | Show that your product is a completely unique offering in the market that can not be easily duplicated. |
The positioning strategy that is best suited for your product depends on your customers' needs, the results of your market research, and the goals you have as a business or product leader. But regardless of the strategy you choose, well-defined product positioning will show that you have honed in on what makes your product uniquely valuable — and that you know how to communicate this value to your customers.
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